St. Joseph County Searches for Circuit Breaker Solutions

June 04, 2007|WSBT-TV Report

St. Joseph County officials say a new cap on commercial property taxes will help ease planned cuts to County services, but won't completely eliminate them. A new state bill caps commercial property taxes at 3 percent, instead of 2 percent, and many state lawmakers say that will help keep St. Joseph County from having to make major cuts. But some County leaders say it only solves half the problem. It took awhile for customers to start trickling in, but Lisa Pryor's brand new business, is suddenly booming. "It's growing, word is getting out, and we're meeting our customers' demand," she told WSBT. But maybe not for long. Under Indiana's new circuit breaker cap, her store's property taxes will go up starting in 2010, and she says that could be very bad news for business. "For us only being open for a year, to add an extra couple thousand dollars to the overhead... it's tough," she said. St. Joseph County leaders know the feeling all too well. The new cap did eliminate projected commercial property tax losses of $4 million to $10 million per year starting in 2010. But the residential tax cap still at 2 percent could still mean a shortfall of up 4 million dollars next year alone. County Commissioners say that means only one thing. "Less governmental services," says Commissioner Steve Ross. "You can't take the money away and maintain the same services you have!" But there is a potential solution attached to the new 3 percent cap bill that allows local taxing bodies to raise income taxes up to 1 percent to make up the difference. Some estimates put the additional revenue at $7 million to $8 million dollars a year. But there's a catch. It all has to be approved by August 1st. Commissioner Ross says there's no way that can happen. "We can't do it," he said. "It would have to be an educational process. You need other governmental bodies to sign off. It's just not a realistic time frame." Still, some believe the plan could help down the road. "That's a very very good possibility," said St. Joseph County Council President Rafael Morton. "Simply because you're looking at possibly increasing the income tax as property tax relief." And because more people pay income tax than property tax, commercial property taxpayers could eventually be given a break. Lisa just hopes her store can stay open until then. "I hope word of mouth gets out there and people come and help us grow so we can prepare for these expenses." Health Care costs for County employees are also projected to jump next year. Some estimates project that boost at up to $6 million. That could put a planned one percent raise for county employees on hold, unless another solution is reached. Some of the other options suggested include a food and veverage tax and hotel-motel tax. But a new type of tax like that could require approval from state lawmakers. County leaders will talk about those options during their next circuit breaker work session in early July.